There are millions of businesses across the world that could potentially sell products internationally, but remain strictly domestic. Yet the benefits of selling overseas are clear, even for a successful business: Exporting can help grow revenue and profits.
Despite the fact that doing business globally is no longer as complicated as it once was, exporters sometimes miss out on opportunities to increase their profit margins because of fear or lack of knowledge regarding how to handle buyers or sellers in other countries—especially with regard to using multiple currencies.
In this article we’ve gathered our top 5 tips for businesses that are looking to get into exporting.
1. Do your research
To succeed overseas, you can’t just replicate how you do business in your local country. Becoming an exporter requires research about potential markets and careful strategizing. At first, you will need to learn which countries are leading suppliers or leading importers of the types of products your business sells. Next, you will need to understand which countries have the lowest duties and where potential competitors might be. finally, you will need to know that selling in new markets will require unique marketing plans.
2. Make a focused plan and be ready to change it
A thoughtful and strategic exporting plan is key to success. Before you start exporting, you can’t know what you don’t know. There may be changes to your operations that you can’t currently foresee based on any number of foreign market conditions. In addition, unexpected roadblocks and new opportunities will come up, so be willing to re-think your strategy and re-work your plan if you need to. That said, flexibility is crucial as well: be ready to change your plan.
3. Build relationships and resources
Building relationships is vital to the success of any business, but when you’re heading out into unchartered waters, the right connections can help you foresee and avoid risks and unknowns along the way. Attending exporter events put on by your state or the federal government, local economic development groups, and chambers of commerce can be a great start.
4. Protect your company from foreign exchange risks
In the world of international trade, it’s difficult to get a full picture of the economic landscape due to increasingly complicated geo-politics, trade wars, natural disasters, and economic crises. The Influence these factors have on currencies is almost entirely unpredictable. In today’s competitive, international marketplace, it pays to be aware of the risks involved with performing transactions in multiple currencies, and how foreign exchange risks can affect your bottom line. Even though there’s no way to entirely avoid foreign currency risk in international business, there are many strategies used to reduce it so that you can protect your profits and protect your bottom line. These strategies are known as "hedging".
5. Be patient
The export process has become easier in recent years thanks to the internet and better logistics services, but you need to remember that becoming an exporter isn’t like flipping a switch. It requires a commitment of time and resources. It can take a few years to find footholds in overseas markets, and there may be mistakes initially. This is normal.
Finely, once you have successfully developed your first market overseas – keep going! The hardest market is usually the first. This is because you have had to set up a lot of new processes and procedures to internationalize your business and products. However, once you have successfully developed this first market then all you have to do is follow the same approach, processes and procedures to launch into another market.
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